Paying good money for a coupon you don’t need, never use, and later sell for less than the purchase price hardly seems like a deal.
The success of online group-buying giant Groupon has inspired the rise of countless copycats and competitors, including BuyWithMe, LivingSocial, and beyond. Now, reports the Boston Globe, daily deal sales are so popular—they’re projected to pull in $5 billion in sales this year—we’re seeing the rise of a related industry: a resale market for coupons that customers once bought because they seemed like amazing deals, but that they won’t use and are willing to sell at a loss.
Lifesta, previously highlighted by this blog on a list of 10 neat new money-saving websites because it helps consumers keep tabs on multiple daily deal sites at once, also serves as a marketplace for coupon resales. The Globe lists a few of these resale sites, and their fee structures:
Lifesta … charges sellers 99 cents plus 8 percent of the sale price … DealsGoRound levies a flat 10 percent of the sale price, and CoupRecoup, like Craigslist, is free. CoupRecoup cofounder Aren Sandersen said the site is not charging, but is “looking to find revenue options at the end of this year.”
How often do group-coupon buyers suffer “Groupon remorse,” as the Globe calls it—when the initial sensation of “What a deal!” is followed by “Why did I buy that?” It’s hard to get an answer there. The coupon sites don’t reveal redemption rates, though one store owner interviewed in the Globe story was told by two daily deal site reps that 20% to 30% of purchased coupons are never used. Mind you, it’s in the interests of both the deal sites and the businesses featured for redemption rates to be as low as possible: That’s money earned for no services rendered whatsoever.
It’s easy to see how a coupon enthusiast might find it hard to use the occasional coupon, especially since they typically expire within a few months, and since they’re often bought on a whim. But the Globe chronicles some coupon buyers who completely went overboard and are swimming in coupons they’ll never use. One woman made a spreadsheet to track all of her coupon purchases and their expiration dates.
Why in the world do people feel compelled to snap up “bargains” they clearly don’t need, and that stand a good chance of never even using?
These daily deal sites have managed to bring excitement of the classic “limited-time only” marketing scheme to a whole ‘nother level. These deals make people feel special—that they’re on the inside, that they’re smart and savvy. What with the time constraints involved, there’s the risk of losing out if you don’t act quickly. And who wants to miss out on the chance to feel special, smart, and savvy?
There’s an expansive 12-part series on Groupon at RetailDoc, which was written mainly to warn businesses of the downsides of doing business with daily deal sites, but that also offers some insight as to why consumers go nuts for these deals:
In a depersonalized world where many are anxious about their jobs, their finances and their relationships, shoppers who use coupons are, by extension made to feel smart. “See how much money I saved,” is a way to say “I’m no fool.”
And yet, it seems pretty foolish to spend money on stuff you don’t need at all, and that you might not even use once—all because some savvy marketers convince you it’s a “deal.”